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Wednesday's Energy Stocks: Treasury yields, oil price decline trigger selloff

U.S. stocks went into a selloff on Wednesday, Aug. 14, after the yield on the 10-year Treasury note fell below the yield on the 2-year note, which some tout as a precursor to a potential recession. Signs of a slowing economy were seen in China and Germany as well.

The Dow Jones Industrial Average dropped 3.05%, closing at 25,479.42, and the S&P 500 slid 2.93% to 2,840.60. A decline in oil prices also hurt the energy sector. Brent Crude trimmed off 3.64% to $59.07 per barrel.

The oil and gas sector performed even worse than the overall market. Supermajor Exxon Mobil Corp. saw shares slide 4.03% to wrap an active session at $67.65. Exploration and production company Ithaca Energy Ltd. is reportedly in the running to buy Exxon Mobil's nonoperated oil and gas assets in the North Sea for as much as $2 billion.

Norwegian oil and gas company Equinor ASA's shares listed on New York Stock Exchange fell 4.02% to close at $16.49 in about average trading. The Norwegian Petroleum Directorate granted Equinor permission to start up the Utgard oil field in the North Sea in September.

Kinder Morgan Inc. stock was down 3.46%, closing a robust session at $19.80. The company is looking to boost efficiency and blending capabilities at its refined products facilities on the Houston Ship Channel through a number of expansion projects worth more than $170 million.

Royal Dutch Shell PLC's class A units closed down 2.29% in brisk trading at $56.38 and class B shares retreated 2.58% to $56.60 on high volume. The oil major's subsidiary Shell WindEnergy Inc. secured federal approval to sell its 50% interest in the 264-MW NedPower Mount Storm wind farm in Grant County, W.Va., to an affiliate of Castleton Commodities International LLC.

Crestwood Equity Partners LP shares shrank 1.52% to $32.99 on above-average volume. The company placed into service its Bear Den II natural gas processing plant and extended contracts for its Arrow crude oil, gas and water gathering system in the Bakken Shale.

Among major victims of the selloff were Cimarex Energy Co., losing 9.13% to wrap a brisk session at $38.34; Apache Corp., giving away 8.39% per share to close its heavy session at $20.08; and National Oilwell Varco Inc., losing 8.05% at the close of an average outing to settle at $18.74.

The S&P 500 Energy Index sliced off 4.12% to close at 416.27, and the Alerian MLP Index declined 1.62% to 225.72.

Electric and diversified utility holding company PG&E Corp.'s shares settled down 6.02% at $15.93 on below-average volume. The Sacramento Municipal Utility District is moving toward an acquisition of PG&E Corp. subsidiary Pacific Gas and Electric Co.'s 7-MW Chili Bar hydro project in El Dorado County, Calif.

Sector members saw declines, but less than the Dow. AES Corp. shares shaved off 2.50% to close at $14.79; American Electric Power Co. Inc. declined 1.96% to $88.48 on active volume; and Edison International lost 1.90% to $71.82 on above-average volume. Pattern Energy Group Inc., a subject of possible takeover speculation, gained on the day, up 0.08% to $25.83 on about triple average trading volume.

The S&P 500 Utilities Index decreased 0.94% to 304.99.

In the renewable energy sector, SunPower Corp. stock plunged 7.82% to close a strong session at $12.37; Sunrun Inc. shares slid 6.26% to finish a heavy session at $15.13; Canadian Solar Inc. units dropped 5.76%, finishing an active day at $20.60; and First Solar Inc. finished 5.15% lower at $58.99 in above-average trading.

Coal producer Contura Energy Inc.'s stock rose 2.51% to close at $31.41 on active volume after the company reported net income from continuing operations in the second quarter of $24.3 million or $1.25 per share, compared with $74.6 million, or $7.24 per share, in the year-ago period. Contura also reduced the size of its board and shuffled its executive ranks.

Market prices and index values are current as of the time of publication and are subject to change.